Industry weathers storm

The PR industry is coping with the recession better than other marketing sectors, according to a trio of reports released this week.

The latest IPA/BDO Bellwether survey reveals that overall marketing spend fell by 7.2 per cent during Q4 2009, while the 'all other' category, into which PR fits, saw just a four per cent downward decline in budgets (see graph).

Overall marketing spend fell for the ninth quarter running in Q4 2009, but the rate of budget-trimming was the slowest since Q1 2008.

IPA president and vice-chairman of Ogilvy Group UK, Rory Sutherland, said: 'These findings are welcome, in that they show the picture painted by the last Bellwether Report was not a false dawn.'

Kingston Smith W1's Financial Performance of Marketing Services Companies Annual Survey also said it expected PR agencies to survive the recession better than other marketing sectors.

The PRCA Trends Barometer for Q4 2009 backs up this upbeat message, reporting that 62.5 per cent of respondents reported feeling more optimistic for their consultancies, while 43.75 per cent saw client budget increases during the quarter.

PRCA director general Francis Ingham said: 'The past two years have been difficult for the majority of PR agencies, but these figures highlight a cautious optimism that the market is recovering.

'Agencies need to carefully manage their pipelines and cash flow, but 2010 should see the industry start to recover.'

According to the latest reported figures (mostly to year-end 2008), the top 40 PR agencies reported higher margins, improved productivity and healthier balance sheets.

Esther Carder, partner at Kingston Smith, said: '(Retained) fee cuts are likely to have kicked in at a later stage, providing PR agencies with greater visibility on future staffing requirements.'

Employment costs continued to grow by 2.6 per cent to an average of £61,226 per head, while pay at director level fell marginally (for a full breakdown, see next week's issue).

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